The Nasdaq composite led the upside in stocks today, rising nearly 1% and wiping away the prior day’s 0.3% decline. Meanwhile, Google owner Alphabet and PayPal are staging new breakouts, providing growth investors a set of new proper entry points.
Alphabet (GOOGL) rose nearly 2% to 1,199.90, clearing a 1,178.26 buy point in a 4-1/2-month double bottom. This is one of the eight key chart patterns that IBD identifies as platforms in which leading stocks jump off and rise into new highs.
The 5% buy zone for Alphabet goes up to 1,237.17.
As noted in this earlier Stock Market Today column, Alphabet also formed a nice seven-day handle on the double-bottom pattern. This provided a slightly lower entry point at 1,161.20.
PayPal (PYPL), noted in today’s new IBD Stock of the Day column, rallied 2% to 86.14 and is still in buy range after clearing an 84.09 buy point in its double-bottom base.
In a double bottom, a stock suffers two major sell-offs. The second sell-off must be deeper than the first one. In other words, PayPal’s low of 70.22 undercut the first low of 71.63. That’s good. It means that a strong shakeout of weak holders has occurred.
The Nasdaq got as high as 7794, good for a new all-time high. The tech-rich composite has now extended its year-to-date gain to 12.9%.
The S&P 500 rose 0.4% on the strength of RV maker, drugstore chain, computer networking, movie, department store and medical software companies. The small-cap S&P 600 jumped nearly 0.7%.
Volume is rising vs. the same time on Tuesday on the Nasdaq and falling on the NYSE.
Veeva Systems (VEEV), a member of IBD Leaderboard and specialist in business software for Big Pharma and biotech firms, moved more than 1.5% higher to 84.63 and new highs.
As noted in Leaderboard, the stock had cleared a 78.38 buy point in a flat base on May 14. Shares are now up nearly 8%.
Homebuilder, coal, diversified operations, fertilizer and soap stocks, however, fell 0.6% or more and weighed on the S&P 500.
The Dow Jones industrial average, which lost nearly 1.2% on Tuesday, traded virtually flat. The popular 30-stock average is trying to cling to its key 50-day moving average.
Walgreens Boots Alliance (WBA), which is replacing General Electric (GE) in the Dow Jones industrials, is nowhere near a potential breakout to new highs. The stock jumped more than 5% to 67.74 in heavy trade but is more than 19% below 52-week highs. Walgreens also trades beneath its downward-sloping 200-day moving average, a sign of underperformance.
PayPal’s IBD Ratings
As seen in IBD Stock Checkup, the next-generation payment provider sports a strong Composite Rating of 97 on a scale of 1 to 99. This means that in terms of fundamentals, stock price strength and depth of fund sponsorship, PayPal is superior to 97% of all companies in IBD’s database.
Walgreens, in contrast, holds a lowly 38 Composite. Shares also trade more than 30% below an August 2015 all-time high of 97.30. Watch to see if Walgreens’ ratings improve over time.
One thing going for the Deerfield, Ill., company: steady profit gains.
Earnings per share have risen 7%, 4%, 13%, 22%, 16% and 27% vs. year-ago levels in the past six quarters. The Street sees earnings rising 17% in fiscal 2018, ending in August.
